The Zohra-Chatterjee-headed Inter-Ministerial Group (IMG) is learnt to have recommended the cancellation of two more coal blocks, including the Fatehpur mine allocated to the controversial SKS Ispat, which was linked to Sudhir Kant Sahay, brother of Union Tourism Minister Subodh Kant Sahay, and the other one to Bhushan Steel and Strips Ltd. It also recommended forfeiture of bank guarantee for the recipients of two other blocks.

However, the fate of the Gourangdih ABC block in West Bengal, owned by the Sajjan-Jindal-owned JSW Steel Ltd. and Himachal EMTA, was not known. However, government sources said the IMG had recommended the cancellation of this block also.

The IMG, which met here for the third consecutive day on Saturday, reviewed allocations of four coal blocks and recommended de-allocation of two blocks. This included SKS Ispat, in which Mr. Sudhir Kant Sahay is a promoter and honorary executive director. The decision to de-allocate the Fatehpur block in Chhattisgarh should come as a sigh of relief for the beleaguered Tourism Minister. SKS Ispat had bagged this block on June 2, 2008 with extractable reserves of 87.6 million tones.

Similarly, the IMG also recommended de-allocation of the New Patrapara coal block allotted to the Pradeep-Khaitan-promoted Bhushan Steel and Strips and others in 2006. The block had huge extractable reserves of around 316 million tonnes. The IMG recommended that the bank guarantees of the Bijahan and Radhikapur East coal blocks in Odisha, allocated to Bhushan Power and Steel and Tata Sponge Iron Ltd., be forfeited. The Bijahan block was allocated in 2006 and holds total extractable reserves of 161 million tonnes. The Tata-group-owned Radhikapur East block holds extractable reserves up to 105.24 tonnes.

The IMG already recommended cancellation of coal blocks held by four private companies, namely Castron Mining Ltd., Field Mining and Ispat Ltd., DOMCO Smokeless Fuels Private Ltd. and Shree Virangana Steels Ltd. The CAG report presented to the Parliament on August 17 said coal block allocations led to a presumptive loss of Rs.1.86 lakh crore. The IMG has forwarded its recommendations to the Coal Ministry, which is expected to take further action in the matter on Monday, September 17.